“It is not when you buy but when you sell that makes principal to your profit”.
Hence I consistently advise my investors to be certain they have gone through their financial plans thoroughly as they will be entering into a 4-year commitment – after taking into consideration the 4-year Seller’s Stamp Duty (SSD) that they will need to pay if they sell their property before four years.
Once they have determined the amount of finances they are willing to outlay, they will set themselves at a great advantage by entering the property market and jade scape generating residual income from rental yields rather than putting their cash in the bank. Based on the current market, I would advise that they keep a lookout virtually any good investment property where prices have dropped an estimated 10% rather than putting it in a fixed deposit which pays two.5% and does not hedge against inflation which currently stands at suggestions.7%.
In this aspect, my investors and I use the same page – we prefer to probably the current low rate and put our benefit property assets to produce a positive cash flow via rental income. I myself have personally seen some properties generating positive monthly cash flow of up to $1500 after off-setting mortgage costs. This equates with regard to an annual passive income all the way to $18 000 per annum which easily beats returns from fixed deposits as well outperforms dividend returns from stocks.
Even though prices of private properties have continued to elevate despite the economic uncertainty, we notice that the effect of the cooling measures have caused a slower rise in prices as when compared with 2010.
Currently, we are able to access that although property prices are holding up, sales are starting to stagnate. I will attribute this on the following 2 reasons:
1) Many owners’ unwillingness to sell at less expensive prices and buyers’ unwillingness to commit to some higher price.
2) Existing demand for properties exceeding supply due to owners being in no hurry to sell, consequently resulting in a embrace prices.
I would advise investors to view their Singapore property assets as long-term investments. They ought to not be excessively alarmed by a slowdown each morning property market as their assets will consistently benefit in time and boost in value as a result of following:
a) Good governance in Singapore
b) Land scarcity in Singapore, and,
c) Inflation which will place and upward pressure on prices
For clients who would like invest various other types of properties in addition to the residential segment (such as New Launches & Resales), they might also consider investing in shophouses which likewise will help generate passive income; and therefore not controlled by the recent government cooling measures prefer the 16% SSD and 40% downpayment required on residential properties.
I cannot help but stress the need for having ‘holding power’. You must never be expected to sell household (and develop a loss) even during a downturn. Be aware that the property market moves in a cyclical pattern and really sell only during an uptrend.